A personal blog sharing ideas and observations on start-ups, the vc industry, technology, and life.

Tuesday, October 19, 2010

Why Don't More MBAs Go Into Sales?

This post seeks to address an interesting conundrum.

The conundrum? Why do so few MBAs go into sales?

Sales is the lifeblood of any company. CEOs are often picked from the sales ranks (Chambers, Palmissano, Ballmer, Thompson, Morgridge, Apotheker). Scaling revenue helps drive enterprise value and exit outcomes. Sales management is a discipline that can easily be taught, like marketing, operations, finance. Sales is a career.

Why are MBA programs failing to teach the value of sales leadership and the role of sales as a worthy management discipline and career? At Kellogg, where I graduated in 1999, I cannot remember a single class dedicated to sales, and yet, we took cost accounting, operations, international finance, organizational behavior...

When alums visited Evanston, they always spoke of the value of organizational behavior to their careers. When I speak to MBAs, I plead with them to go into sales.

As a CEO, I spend almost all my time selling. Selling my company to recruits, selling our product to customers, selling our equity to investors. The ability to manage a sales process - first meeting to order - and to understand account dynamics (decision makers, sponsors, technical buyers) - is vital.

Moreover, securing product-market fit, a hugely important milestone for any start-up, requires a passion for selling.

I'd love to see some comments that help answer the conundrum, let me start with a few ideas as to why sales falls lower than cost-accounting on the MBA curriculum and lower than investment banking as a career vocation:

MBAs are risk averse and don't like leveraged (quota) comp models

MBAs view sales pejoratively as many great sales people are not pedigreed

MBAs think sales is not strategic

Now, an indictment, why don't MBA programs lead the way here? Where are the courses, the research work, the career placement offices? Why don't business schools teach sales as a discipline?

28 comments:

Interesting question. I tend to agree with the points you mentioned. Also, this reminds me of a discussion I had with few friends recently (some of them ivy league MBA grads) - why don't we see a lot of MBAs in startups? We kind of concluded that most MBAs excel at analytical roles, and roles where there's (sort of hidden) comfort of empirical data to make decisions. They get lost in environments that have ambiguity (like in startups).

Thank you for your comment and ideas. I agree that ambiguity is hard to get used to. Finding ways to process uncertainty without the lack of answers killing you is a hugely important learning in start-up life.

I coincidentally asked the same question to Dean Blount (via the KSA) yesterday, and I'm really eager to hear her answer.

I fully agree with the points you make, and I think recruiters are to blame, too. Why don't you see any recruiters from Sales on b-school campuses? Do they think MBAs aren't a good fit with the sales culture? Do they look down on them? Does pedigree bother them? Do they think MBA students are not prepared *because* their schools lack a specialized track?

Get more employers to recruit MBAs for sales jobs, and I guarantee you many students will start seeing the career in a new light. The herd mentality will take care of the rest.

I coincidentally asked the same question to Dean Blount (via the KSA) yesterday, and I'm really eager to hear her answer.

I fully agree with the points you make, and I think recruiters are to blame, too. Why don't you see any recruiters from Sales on b-school campuses? Do they think MBAs aren't a good fit with the sales culture? Do they look down on them? Does pedigree bother them? Do they think MBA students are not prepared *because* their schools lack a specialized track?

Get more employers to recruit MBAs for sales jobs, and I guarantee you many students will start seeing the career in a new light. The herd mentality will take care of the rest.

I think there's a simpler reason. In safer jobs like consulting, investment banking, and finance, having a top-tier educational background can make your clients feel like they're getting access to the best and brightest to help them solve problems. Sales isn't like that - it's results oriented. As an MBA in sales, you have to compete on your ability to sell. Having a fancy MBA (and I have one myself) doesn't necessarily help you sell. Also if you graduate in your late 20s or early 30s, you'll be competing with people who have been selling for 8-10 years when you're just getting started. That's pretty challenging. I just think most MBAs don't see a huge return on having an MBA in sales - it's a more performance oriented career path that's open to people without MBAs or advanced degrees.

Charles, I believe you've hit the nail on the head.Having an MBA does not necessarily give you the ability to sell. If the MBA holder goes into sales he will be competing against some high powered individuals, many of whom have limited advanced schooling, and the MBA holder may find themselves struggling. This is not very good for self esteem. This danger is far less present in traditional roles such as employee management, finance, operations management.

I have been in sales for 14 years and have risen through the ranks from lowly inside sales person to Key account Executive. I believe the key to sales success lies in three pillars: 1. understanding people 2. understanding your product/business 3. understanding your customers business.The only one of these which are taught in business schools (and marginally at that) is #1 understanding people.This helps us understand why MBAs in general are ill equipped to succeed in sales.

None of this helps us understand why not a single MBA program is dedicated to honing Sales and Sales Management skills. This needs to be explored further.

The irony is that many job descriptions for sales, sales managers and the like list having an MBA as advantage. In all of the sales positions I ever had in tech firms, there was not a single MBA holder in the sales teams I work with. Not one and that includes stints at Oracle and Siebel.

Sales has never been taught in MBA programs mainly because sales has been looked down upon. Sales was never deemed "academic" enough and too career oriented for the college environment where analytical and theoretical concepts are prized.

Thus most companies took it upon themselves to teach sales skills to their teams. Companies like IBM, Dec and others had incredible sales training and internship programs. So I blame the colleges for this situation. Add sales courses in the MBA schools and we will start seeing a change.

While I agree in your premise that sales is not generally appreciated by MBA programs, there are many that have sales management courses. I went to a top-tier program that had a sales management course, but also emphasized sales models in many of our strategy and entrepreneurship courses. So I believe the tide is shifting quite radically from the management education perspective. However, I think charleshudson makes a reasonable argument as to why a MBA wouldn't see sales as a compelling career choice.

I suspect there's relatively little academic research on sales outside of incentive systems in OB -- if true, that would make it something not advocated for in faculty meetings about curriculum. It's easy to forget that top MBA programs are driven by academics who live in the publish or perish system and are evaluated on their scholarship as much or more than their teaching. In my MBA program I also don't recall a single adjunct or guest speaker from sales.

Charles is also right it's relatively hard to switch into sales several years into your career, and many (most) MBA students are there to switch careers.

There is probably some stigma about sales, but I'm not sure I buy it's "looked down upon" as much as it's a job thought of as being less creative, less powerful, and less prestigious -- none of which are entirely untrue, at least in most organizations.

1. MBA programs are mostly taught/administered by academics.2. Academics have little knowledge/experience w/ selling.3. Few courses are offered on selling.4. MBAs don't take them.5. The business world looks elsewhere for sales candidates, since MBA programs don't produce good salespeople.

Hi,Recently I was accepted into a MBA program, however, the more I look into it I'm pondering how it will help me.

I've owned web businesses for many years now.I would love for and MBA to include sale and marketing with an emphasis in Social Media. The way people buy is changing and I want to understand it. It would help if I could have an MBA with strategic business planning focused in this area and in the other MBA principles. I want more than just a certificate that companies are offering today.

Great question and great post. I had 5 years of sales experience before my fancy MBA and can say honestly it makes all the difference in negotiation, interviewing, business development, networking and presentations. You are always, always selling your ideas. This goes double for folks in marketing and triple for folks in enterprise marketing, where the work they do has to be held up by the front line sales force, in person, face to face.

While I agree that sales is a critical role, and that it is very strategic, I think great salespeople are more born than made. If you're a great salesperson you're definitely well aware of it, are showered with praise, and probably making good money at a young age. You're not going to stop one day and just say "Hey! I'm a huge success, but I want to stop making all of this money and go into debt to get more education!" As you mentioned, they're already on the fast track, and they're already making big bucks- what's in it for them?

Alternatively, if you're a less than great salesperson, you probably hate your job, and will view an MBA as a way out of sales!

Also, not sure why you think its "sad" that MBA's go into business development, which is often just very strategic selling.

For the past few years I have encouraged 100's of MBA's from my Ivy alma-mater to go into sales or BD with emerging startups. Their answer is often the same - "I made more money (base salary) as an engineer, and want to be a PM/Strategy".

Fact: Most startups hire less PM's these days, and go lean.

Fact: Good Sales/BD folks make 1.5 - 3x as much as PM's, and will never have to look for a job again.

Personally I think most MBA's are scared, and went to get their MBA b/c they were not risk adverse enough as it was, and felt they needed another degree to get them out of engineering and into the "management" level.

I also disagree that training is needed to make a competent sales person. I ran a small team (8 people) with almost no training that brought in close to $5M in revenue. Sales is 20% training, and 80% hunger in my book.

1. You don't need an MBA to do sales. Most of the time, frankly you don't need any degree to do sales. There are no barriers for entry into a sales career- it can be taught on your own, while MBA programs strive to teach concepts that cannot be easily self taught like financial modeling.

2. MBA students are looking for non-customer facing careers (generally) and also prestige. Sales doesn't come with the prestige that a finance or consulting position offers, which are the main career paths of MBAs. Also client facing roles, like sales are hard- there's a lot of rejection, fickleness of customers, and pressure. After years of more schooling and at least 100K spent on program, most people want to get away from careers like that.

In my cohort, of 72 EMBA students, three were from sales. Most came from general management, finance, engineering, and consulting. The three from sales were VP level executives, not feet-on-the-street guys. The lack of MBA salesmen may be less a matter of MBAs not wanting to go into sales and more a matter of salesmen not being attracted to the breath of education offered in the typical MBA curriculum.

To reflect back what you said, but turned around:

* Salesmen are activated by short-term quota compensation for well defined goals. Entrepreneurs, consultants, etc. are more in tune with building for the long term and for delaying compensation into the future.

* I've heard sales people denigrate MBAs as people who don't know what it means to really sell a product. MBAs (not this one) may look down on sales people, but the reverse can also be true. There are striking process differences between sales and other corporate functions. This naturally leads to cultural differences.

* Sales people tend to think strategy is for the birds because they are kept more keenly aware than any other function in the company of how important revenue is.

Given the breadth of most MBA curricula, how would you add sales oriented courses? What would those courses be? Given that full-time MBA programs are starting to recruit people with less and less job experience, perhaps Dale Carnegie 101 would be a good place to start.

I like many of the comments above but also want to add some additional:

Where MBA's tend to index within "sales" organizations are within business development and corporate development.

Media sales is viewed upon as tactical.Business development is looked as strategic.

Since MBA work tends to prepare for the strategic side, this is where most MBA's gravitate towards.

I totally agree with you that MBA programs should teach sales management and sales theory. A company cannot exist without a sales function of some kind (either direct, channel, etc) and everyone should be trained as such

Absolutely agree with you. Sales is critical to launching a business; human resources is critical to scaling a business ... and neither function is given adequate attention in most MBA curricula.

One reason for this may be: it is assumed (incorrectly) that intellectual horsepower is less important in these two functions than emotional intelligence (at least compared to traditional MBA functions such as finance or strategy). Those in elite MBA programs (faculty and students) tend to spike on IQ but maybe less so on EQ.

So perhaps the target audience is not well suited for these functions, and therefore has less interest in learning (or teaching) them? That's not the say MBA students shouldn't be required to develop a better understanding and appreciation of both functions, however.

If a former Product Manager has to sit through Accounting or Microeconomics, I see no reason why a former Corporate Finance analyst shouldn't have to sit through Sales or Human Resources.

Thank you for all your thoughtful comments. I am glad to hear that Stanford and Thunderbird offer strong sales classes - I believe there is a huge opportunity for a top school to lead the way in strong sales management majors, beyond clinical profs like a Mark Leslie, who I know does an amazing job.

Great post and question Will. I think you and the commenters have come up with some interesting theories. I will say that MIT Sloan (I'm an alum, full disclosure) has done a better job than most programs by integrating sales, especially into the entrepreneurship curriculum. It's always been a core part of the entrepreneurship classes and tracks, including a class called Tech Sales. There is now also a Sloan Sales Conference: http://www.sloansalesconference.com/, and a club that runs it: http://www.sloansalesclub.com/.

Per my own experiences though, I do think there are larger issues though about the way sales organizations are managed and incentivized at large corporations, tech and otherwise that lead to valid concerns by MBAs about the costs/benefits of being part of those organizations.

http://instantpotential.comThank you for this article. I have an MBA and I have been in Sales for more than 10 years now. As a Sales Manager now, I have interviewed thousands of people. I realized that the higher educated the interviewee, the more risk adverse he/she is. Many MBA holders could have been Top Sales People, but because of the misconception of "only people with little education goes into sales" have prevented many MBA holders from having a potentially fulfilling and lucrative career.

Hi To All, I just came across Will's blog.I have a passion for sales, have had much success, and am a student of the game.

I believe that natural abilities play a large role in sales. I also believe in the body of knowledge created regarding best practices, sales methodologies ( e.g. learning Power -Base methods many years ago was entirely enlightening, making me a believer in on-going sales knowledge acquisition regarding sales methods, techniques, and honing skills daily ) Having been involved with start-ups run by engineers (" I have built the best mouse-trap, it should sell itself "), I believe sales ( education ) should be mandatory in any MBA program, even if you are not responsible for sales,... everyone sells !The most successful companies are driven by a top-down sales culture.When working at Management Science America, we would consistently beat McCormick and Dodge . MSA trained everyone , from the maintenance people, admin people, and all who worked at MSA.. in sales methodology )McCormick and Dodge had a better product, but , were technical in nature and did not realize the potential of their technology , given lack of sales expertise ( please forgive me for generalizing here)

Having worked with great leaders ( Joe Tucci, John Imlay, others ) , it is clear to me that like Microsoft and other great companies, a sales culture drives success, technology by itself does not satisfy critical aspects of a business and human relationships.

Let me start by saying I have been in sales for 8 years now (mostly media/ad sales)... and I'm currently trying to get out.

I could see offering some basic personal selling classes to MBAs as there are some sales tactics that come in handy when selling your ideas up the ladder or to employees etc. I think important, however, to point out that the aforementioned is NOTHING like a career in sales. Like you mentioned in your blog post, in a sales career you are constantly riding the quota roller-coaster.

Though I don't carry an MBA, I do have a B.S. in business administration with a concentration in marketing which is not as common in media sales as you might think. The reason I'm more of an upper-middle sales rep rather than top dog can be summed up with one word... objectivity. I don't care what your product is or what sales cliche you'd care to use. In order to be THE salesman, you have forsake objectivity to some degree. This is just something that I, and certainly an MBA student would have a major issue with.

Very interesting post. I asked administrators of my MBA program at Edinburgh Business School this question in 1995, and they said that sales - the actual act of selling - does not have a process universal enough from which to design a program. They have since added a sales management course. I found this when researching another MBA disconnect. Few MBA programs address intellectual property well; it is often viewed as a legal issue...Sloan and Stanford are some of the exceptions. Of course some of the best high tech leaders, whether formally taught or not, had/have and inherent understanding of both.

Hi I know this is an old post/thread, but I'm a 2009 MBA grad from a top 10 business school and I have been DESPERATELY trying to start a sales career. I cannot find any major employers willing to take an MBA grad with 5-7 years of work experience and put them in a front line customer facing role. Not even that, I cannot find any employers that are willing to put be in a sales training environment where I can prove myself ready for the outside world. Can anyone reading this post help me? I have real world marketing and client based management consulting experience. I want the leveraged compensation model. But I do not want to start from scratch as if I was out of undergrad...is that going to be a deal breaker? Please email me at sdmody@gmail.com if you have any advice. Thank you!